New Nuggets – July 2019

Bay Area

Panel Rules that Californian Prisoners Can Legally Possess Cannabis

On June 11, a panel in Sacramento overturned the convictions of five prisoners for allegedly possessing cannabis while incarcerated, citing the language in Proposition 64. Prop. 64 legalized an ounce or less for all adult residents in the state, and no exemptions or exclusions for prisoners can be found in the law. While possession of one ounce or less is technically legal in prisons located in California, smoking or consuming cannabis is against prison rules. “The Attorney General uses arcane rules of statutory construction, twists the meaning of the words of the statute, urges us to disapprove of cases directly on point, and makes a host of policy arguments why we should not apply the plain language of the statute,” the court document reads. “The question of law we review de novo is whether the plain language of the statute leads to an absurd result. We conclude it does not. A result is not absurd because the outcome may be unwise.”

Harborside Goes Public on Canadian Securities Exchange

Trading under the ticker symbol HBOR, Harborside Inc. announced on June 10 that it is listing public shares on the Canadian Securities Exchange. “We reached a milestone by becoming publicly traded on the Canadian Securities Exchange and now, Harborside is officially an international company,” Steve DeAngelo stated. “We were the David that stood up to Goliath and beat overwhelming odds, which established the right of state legal dispensaries to operate without federal interference. This sends a clear message to the world that when we are united and are determined, nothing can stop us. The cannabis renaissance is global and coming to a town near you soon!” Harborside also issued a letter of intent to acquire Airfield Supply Co., a dispensary located in San Jose. Harborside is one of the oldest licensed dispensaries in the United States, and it continues to blaze the way for other cannabis businesses to follow.

Colorado

New Law Expands Cannabis Business Opportunities

A bill signed by Gov. Jared Polis is opening up new business opportunities for Colorado cannabis companies. House Bill 19-1090 was signed by the governor on May 29, and it will allow for outside investors to join the cannabis industry, as well as private equity firms and venture capitalists. “The bill repeals the provision that prohibits publicly traded corporations from holding a marijuana license,” the bill summary states. Medicine Man Technologies, an existing Colorado cannabis company, wasted no time to take advantage and announced on June 5 that it will be partnering with Los Sueños Farms, the “largest sustainable cannabis farm” in North America. According to the press release from Medicine Man, Los Sueños Farms already has 36 acres of cultivatable farmland and 36,000 square feet of greenhouses fit for cannabis plants. “These acquisitions will increase Medicine Man Technologies’ footprint and expand its operations in cultivation, extraction, production and sales, advancing its plan to become a fully vertically integrated operator in the cannabis industry,” the announcement stated.

Denver Metro Dispensaries Become Target for Robberies

Denver Police Department (DPD) is busy investigating what seems to be an ongoing issue in the “Mile High City.” Police believe that the same group of burglars is hitting several metro area cannabis dispensaries. It’s no secret that the industry is an almost strictly cash-based business, making it appealing to thieves, officials have observed. The DPD released one image to the public of a group of individuals who were caught on camera prying the front door of a cannabis dispensary open with a crow bar. DPD sent out a notice stating, “Suspects are three to four males, and possibly two females, with their faces covered and wearing gloves.” The police notice also revealed that 34 dispensaries have been robbed in the metro Denver area, and most appear to be along the I-25 and I-70 corridor. The DPD is urging dispensary owners to make sure security systems are operating properly and that locks are secure.

Los Angeles

Los Angeles Releases Request for Social Equity Program Assistance

Los Angeles’ Department of Cannabis Regulation (DCR) released a Request for Qualifications (RFQ) on June 14, which seeks to find business development services for the city’s social equity program. The RFQ outlines the need for consultants to construct business development curriculum, training, business, licensing and compliance assistance. “The goal of the Social Equity Program is to promote equitable ownership and employment opportunities in the cannabis industry in order to decrease disparities in life outcomes for marginalized communities, and to address the disproportionate impacts of the ‘War on Drugs’ in those communities,” the Department of Cannabis Regulation Executive Director Cat Packer stated. According to the press release, the program is the “largest municipal cannabis social equity program in the nation.” The DCR started to conduct workshops to assist applicants through the eligibility verification process, and the RFQ will help it to flesh out the application process more fully.

Michigan

Marijuana Regulatory Agency Holds First Meeting

On June 13, the Marijuana Regulatory Agency (MRA) held its first meeting at the Williams Building in Lansing. The MRA falls underneath the Department of Licensing and Regulatory Affairs (LARA) and was created to replace the Michigan Medical Marijuana Licensing Board, after that board was abolished in April by Gov. Gretchen Whitmer. “Executive Director Andrew Brisbo kicked off the meeting by stressing his Agency’s commitment to outreach, education and collaboration,” a LARA news release states. “Brisbo also announced that the next three scheduled public meetings of the MRA will coincide with work groups and will be held at locations around the state.” The new board functions as a licensing board for both the medical and recreational cannabis industries. In order to be more efficient than the previous board, the MRA created an online application licensing to help speed up the process.

Governor Calls for Sensible Cannabis Banking

Gov. Gretchen Whitmer joined 18 other governors to call upon Congress on June 13 to approve the Secure and Fair Enforcement (SAFE) Banking Act. Banking institutions currently cannot cater to cannabis businesses due to the federal status of cannabis under the Controlled Substances Act, but the SAFE Banking Act would end that policy. “There is an inherent danger for businesses operating in an all-cash business, because financial institutions are unable to accept the risks and penalties associated with providing service to this industry under current law,” Gov. Whitmer stated. “This letter sends a clear message to Congress that our states are looking for a real solution to a real problem, and we support them to get this done.” There are now 34 states with medical cannabis programs and 10 with recreational cannabis markets, and the SAFE Banking Act would help legitimize the cannabis industries in those states.

Oregon

Oregon State University to Open Hemp Research Center

On June 13, Oregon State University (OSU) announced its plan to open one of the nation’s largest hemp research centers. The Global Hemp Innovation Center will fall under the university’s College of Agricultural Sciences and provide an environment for studies on the hemp plant. “At Oregon State University we’re proud to be leaders in technology and innovation,” said Alan Sams, dean of College of Agricultural Sciences. “So in the College of Agricultural Sciences we’re very excited to be launching a Global Hemp Innovation Center. Oregon is the center of hemp production in the U.S., being the leader in terms of acreage of production and its economic value.” The center will also offer certification for seeds and protect intellectual property for hemp farmers who participate in the program. According to KTVZ, OSU will be the only university in the country to certify hemp seeds.

Oregon Liquor Control Commission Report Indicates Improvements to Tracking System

In 2018, the Oregon Liquor Control Commission (OLCC) was audited by the Oregon Secretary of State and was found to have monitoring and security issues. But on May 29, Secretary of State Bev Clarno released a new report that recognized the OLCC’s efforts to improve its tracking system. “The agency continues to take steps to improve the state’s recreational marijuana program and the information systems that support it,” Clarno wrote in the audit report. “Management has implemented processes to improve marijuana system controls, including risk-based and proactive inspections, reconciliation processes, and system access management.” Even with the improvements, however, the new report added that more improvements could be made to the OLCC’s recreational regulation processes and its IT security. The OLCC is currently addressing its Cannabis Tracking System vendor to improve system functionality and update security features.

San Diego

Poway Adds Cannabis to its Social Host Ordinance

Poway City Council voted on June 4 to update the city’s Social Host Ordinance to include the use of cannabis and other controlled substances. Chapter 9.54 of the Poway Municipal Code was updated to impose liability on residence hosts who are aware or should be aware of underage consumption. The updated ordinance applies to cannabis in a similar manner to alcohol, and it outlines the responsibilities of event or party hosts. “The proposed ordinance recognizes the consumption of marijuana and other controlled substances by minors presents many of [the] same adverse effects as the consumption of alcoholic beverages,” explained City Attorney Alan Fenstermacher. Civil liabilities also apply, including responsibility for the recovery of enforcement services. All four councilmembers who were in attendance at the meeting voted unanimously in favor of the amendments.

Washington

HEMPFEST Files Lawsuit against Liquor & Cannabis Board

On June 4, the organizers behind HEMPFEST filed a lawsuit in Thurston County Superior Court against the Washington State Liquor and Cannabis Board (LCB) for overreach based on new advertising restrictions. The LCB recently imposed Bulletin 19-01, which bans any licensee from participating at events like HEMPFEST in any way that involves “any sign” that “references” the business, which bans signs and booths at HEMPFEST that identify sponsors. “We believe that the new interpretation of Washington State’s 502 ad guidelines are so overreaching and restrictive as to be unconstitutional,” said Vivian Peak, director of HEMPFEST. “It is imperative that Washingtonians have access to accurate and up to date information regarding the cannabis products they purchase and consume, and that those citizens and others are able to identify the source of that information.” HEMPFEST lawyers said that the new advertising restrictions impose on the event’s right to free speech.

A team of researchers from University of Puget Sound and University of Washington published a paper on June 18 that suggests legal cannabis sales increased cannabis consumption and diverted sales away from the black market. To determine this data, researchers analyzed wastewater samples and measured for tetrahydrocannabinol (THC) levels. THC metabolite levels increased in the wastewater at an average of nine percent per quarter, from December 2013 to December 2016, which was in line with the rollout of recreational cannabis sales. “A wastewater?based measure of cannabis consumption suggests a significant increase in consumption in Washington, USA following legalization, and that legal sales appear to have displaced a large portion of the illicit market,” researchers concluded. The findings were published in Addiction, a journal created by the Society for the Study of Addiction, and partial funding was provided by the National Institute on Drug Abuse.

National

Researchers Find Evidence of Cannabis Smoking Dating to 500 BCE

In a paper published in Science Advances on June 12, a team of researchers described the “earliest directly dated and scientifically verified evidence for ritual cannabis smoking.” In East Asia, the team found evidence of psychoactive cannabis being burned in crude wooden bowls at a burial site. “This phytochemical analysis indicates that cannabis plants were burned in wooden braziers during mortuary ceremonies at the Jirzankal Cemetery (ca. 500 BCE) in the eastern Pamirs region,” researchers wrote. “This suggests cannabis was smoked as part of ritual and/or religious activities in western China by at least 2,500 years ago and that the cannabis plants produced high levels of psychoactive compounds.” Hemp seeds and fibers are commonly found in archaeological sites, but few have any evidence of cannabis being consumed for its psychoactive properties. The discovery was highlighted in National Geographic, which generated widespread interest.